Congress Tries to Stunt HSA Growth

I’ve got an oped in today’s Orange County Register on congressional efforts to smother health savings accounts (HSAs) in the cradle:

In April, House Democrats passed legislation that would impose onerous and unnecessary reporting requirements on people with tax-free health savings accounts … what really bothers them is the fact that HSAs let workers control their own money.

Read all about it here.

Read about letting workers control all their health care dollars here.

REAL ID Deadline Passes - Zero Compliance

Yesterday - Sunday, May 11, 2008 - was the statutory deadline for state compliance with the REAL ID Act. Not a single state has begun issuing nationally standardized IDs as called for by the law. Nor are they putting driver information into nationally accessible databases.

Matthew Blake of the Washington Independent has a solid recap of the situation.

Rethinking Ethanol: A Lesson Only Half Learnt by the NY Times

Sunday’s NY Times acknowledges that:

It is time to end an outdated tax break for corn ethanol and to call a timeout in the fivefold increase in ethanol production mandated in the 2007 energy bill.

But then it goes on to state:

This does not mean that Congress should give up on biofuels as an important part of the effort to reduce the country’s dependency on imported oil and reduce greenhouse gas emissions. What it does mean is that some biofuels are (or are likely to be) better than others, and that Congress should realign its tax and subsidy programs to encourage the good ones. Unlike corn ethanol, those biofuels will not compete for the world’s food supply and will deliver significant reductions in greenhouse gases…

Congress’s guiding principle should be to tie federal help to environmental performance. The goal is not just to stop the headlong rush to corn ethanol but to use the system to bring to commercial scale promising second-generation biofuels — cellulosic ethanol derived from crop wastes, wood wastes, perennial grasses. These could provide environmental benefits and reduce dependence on oil without displacing food production.

But as noted on this blog previously, this is wishful thinking. Tilting the field to help cellulosic ethanol, whether directly through subsidies or indirectly through mandates, will inevitably make it more attractive for farmers to divert land and water to grow fuel rather than food. As a result some portion – perhaps even a large portion – of the resources that would otherwise be used for food production would go toward fuel production.

It is, therefore, naïve to claim that fuel production will not compete with food production. But the NY Times seems naïve about mandates, apparently assuming that mandates don’t entail costs, especially if they are in pursuit of goals it deems laudable.

One can get an inkling of the potentially disastrous effects of tilting the field toward biofuels (such as ethanol) from the Burmese experience regarding jatropha, a bush that can provide feedstock for biodiesel. The Wall Street Journal’s James Hookway reported last week that:

United Nations World Food Program officials say the storm wiped out much of Myanmar’s midyear rice harvest and add that grain stockpiles are dwindling because of the military’s jatropha drive. That makes it likely Myanmar’s plans to export rice this year to other needy nations such as Bangladesh will be scrapped…

The most notorious example of errant policy making reflects the fascination of 75-year-old junta leader Senior-Gen. Than Shwe with biodiesel as a way to break the country’s dependence on expensive imported oil.

In December 2005, the battle-hardened commander kicked off a nationwide campaign to grow jatropha, a squat, hardy bush that yields golf-ball-sized fruit containing a sticky, yellow liquid that can be made into fuel. His drive was similar to initiatives in other parts of the world, including the U.S., which encouraged farmers to grow corn, palm oil or other crops for biofuel and which are now facing criticism for driving up the price of food. [Emphasis added]

India, China and other countries grow jatropha on scrubby land where food crops can’t survive. But researchers say that in Myanmar, some of the country’s most fertile land has been converted to cultivating the shrub…

It isn’t clear how much of Myanmar’s arable land has been converted to jatropha cultivation. Organizations such as the U.N.’s Food and Agriculture Organization warned the government about the risks of farming jatropha on land that could be used to grow food. But Gen. Than Shwe’s goal was to set aside an area the size of Belgium to grow jatropha – a huge commitment for Myanmar, which is roughly the size of France.

In 2006, the chief research officer at state-run Myanmar Oil and Gas Enterprise said Myanmar hoped to completely replace the country’s oil imports of 40,000 barrels a day with home-brewed, jatropha-derived biofuel. Other government officials declared Myanmar would soon start exporting jatropha oil.

Despite the military’s efforts, the jatropha campaign apparently has largely flopped in its goal of making Myanmar self-sufficient in fuel.

While this is an extreme example of poorly conceived policy, it should be kept in mind that the Burmese regime was pursuing what many consider to be a laudable goal – energy independence (with – who knows – possibly the hope of obtaining carbon credits). And what a totalitarian regime can effect with fiat (and sticks), other governments can accomplish with a combination of seemingly more benign policies, specifically subsidies and mandates (i.e., carrots and sticks), in pursuit of the same laudable goals.

The lesson from all this, which the NY Times doesn’t quite get (reiterating from the earlier post) isn’t that biomass – and farmers — shouldn’t play a role in helping meet our energy needs, but that “If farmers can profitably grow fuel rather than food through their own efforts, so be it. But we shouldn’t favor growing one over the other either through subsidies or indirectly through government mandates for so-called renewable fuels. And if anything should be subsidized or mandated, it shouldn’t be growing fuels. That would inevitably compete with food.”

Actually, the Left’s Understanding of Health Insurance Markets Really Is that Bad

The Center for American Progress’s Ben Furnas responded to my post about the political Left’s misunderstanding of health insurance markets by … showcasing the political Left’s misunderstanding of health insurance markets.

I claimed that the individual market provides insurance reliably to lots of very sick people – protection better than or equal to that provided by job-based health insurance. Furnas responds:

The main reason (not mentioned by Cannon) that some people who develop health problems can renew their health insurance without seeing higher premiums is federal regulation through the Health Insurance Portability and Accountability Act (HIPAA). States have improved on these regulations, offering more protections to sick consumers of private health insurance, but John McCain, in his push for an unregulated national market, would undermine these additional protections.

Actually, 75 percent of policies sold in the individual health insurance market provided those protections before government required them.

Furnas has more to say about the dangers of freedom and the need for more government control of people’s health care decisions, but that suffices to make the point.

Back to the Past

Lyndon Baines Johnson, May 22, 1964, at the University of Michigan:

The challenge of the next half century is whether we have the wisdom to use that wealth to enrich and elevate our national life, and to advance the quality of our American civilization…. For in your time we have the opportunity to move not only toward the rich society and the powerful society, but upward to the Great Society….

The Great Society … is a place where the city of man serves not only the needs of the body and the demands of commerce but the desire for beauty and the hunger for community…. It is a place where man can renew contact with nature. It is a place which honors creation for its own sake and for what it adds to the understanding of the race. It is a place where men are more concerned with the quality of their goals than the quantity of their goods….

Worst of all, expansion [of the economy]  is eroding the precious and time-honored values of community with neighbors and communion with nature. The loss of these values breeds loneliness and boredom and indifference….

The solution to these problems does not rest on a massive program in Washington, nor can it rely solely on the strained resources of local authority. They require us to create new concepts of cooperation, a creative federalism, between the National Capital and the leaders of local communities….

For better or for worse, your generation has been appointed by history to deal with those problems and to lead America toward a new age. You have the chance never before afforded to any people in any age. You can help build a society where the demands of morality, and the needs of the spirit, can be realized in the life of the Nation…Will you join in the battle to build the Great Society, to prove that our material progress is only the foundation on which we will build a richer life of mind and spirit?…There are those timid souls who say this battle cannot be won; that we are condemned to a soulless wealth. I do not agree….”

David Brooks, May 9, 2008, everywhere:

It used to be that American conservatives shaped British political thinking. Now the influence is going the other way….

[T]he central debate of the 21st century is over quality of life. In this new debate, it is necessary but insufficient to talk about individual freedom. Political leaders have to also talk about, as one Tory politician put it, “the whole way we live our lives.”…They’re trying to use government to foster dense social bonds…. They’re offering something in tune with the times….

American conservatives won’t simply import this model. But there’s a lot to learn from it.”

Question: How do these two differ?

Answer: They don’t. Both “hunger for community.” Both condemn a “soulless wealth.” Both promise decentralization. Both believe in the end that community can and should be created by coercion.

Cracking Down on Legal Permanent Residents, Pt. II

A couple of weeks ago, I wrote about a legal permanent resident who was arrested because he shared a common name with a suspected illegal immigrant. It illustrated how the E-Verify program would foul things for legal workers, a prominent subject of this paper.

Here’s another story of legal permanent resident mistreatment. This illustrates how overblown terror fears can cloud officials’ judgments and foul things for … well, everyone.

It seems that a woman in Florida asked her relatives in Monterrey, Mexico to ship her the birth certificates of two relatives who want to apply for their Mexican passports at the consulate in South Miami. At the behest of U.S. Customs and Border Security, the envelope is being held by the United Parcel Service in Louisville, Kentucky until she identifies herself further.

Asked to explain, a CBP spokeswoman in Washington asserted the U.S. government’s right to examine everything entering or exiting the country and said, “Identity documents are of concern to CBP because of their potential use by terrorists.”

This is a terrific example of poorly generated suspicion. In our paper on predictive data mining, Jeff Jonas and I wrote about how suspicion is properly generated in the absence of specific leads: “[T]here must be a pattern that fits terrorism planning … and the actions of investigated persons must fit that pattern while not fitting any common pattern of lawful behavior.”

False identities and forged documents have been used by terrorists, but with little purpose or effect. There just isn’t a proximate relationship between false identification and successful attacks. But obviously some terrorists have believed that they need false or fraudulently-gotten IDs. So there is a weak but plausible relationship between shipping identity documents and terrorism planning.

But that doesn’t end the inquiry. We have to ask a second question: Does shipping identity documents fit any common pattern of lawful behavior? Yes it does, such as the example here: legal permanent residents seeking to apply for home-country passports at consulates in the U.S. There are probably dozens of other reasons for shipping identity documents as well. CBP’s suspicion of this woman and her documents is not well founded.

One is reminded of the cases where photographers have been harassed or arrested for photographing buildings and monuments. Yes, photography of big things is potentially consistent with terrorism planning! Oh, but it’s also consistent with having an interest in architecture, having an interest in photography, taking a vacation, working as a photographer for a newspaper, and so on, and so on …

This woman should get her documents without further delay.